291 Liberty Dr

Hanover, MN 55341

$490,000D

4 bd · 3.0 ba · 2,935 sqft · Built 2026 · Townhouse · Pending · 378 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,799/mo
• Mortgage (P&I): −$2,570
• Tax + insurance: −$292
• HOA: −$155
• Vac / Maint / Mgmt: −$798
• Net cashflow: $-16/mo
• Annual: $-187/yr
• Cap rate: 6.25%
• Cash-on-cash: -0.14%
• DSCR: 0.99
• 1% rule: 0.78%
• Cash to close: $137,200

Investor read

• This is a 4-bed/3.0-bath townhouse listed at $490k.
• At list price, monthly cash flow is $-16 ($-187/yr) — negative.
• To cash-flow at today's rent, offer at most $487k (0.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $380k (22.5% below list).
• It's been on market 378 days — a 12% lower offer ($431k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $380k (22.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#293 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• Buffalo-Hanover-Montrose Public Schools (town): math 52% / reading 56% proficiency, ranked #63 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Hanover Elementary (math 72% / reading 67%, grade A-, #74 of 857 statewide, top 10%, 369 students, 18% FRL); Buffalo Community Middle (math 48% / reading 53%, grade C, #72 of 258 statewide, top 29%, 1,142 students, 30% FRL); Buffalo Senior High (math 42% / reading 61%, grade D+, #124 of 471 statewide, top 27%, 1,818 students, 24% FRL).
• Market conditions: 102 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 2y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Cap rate 6.3% vs local median 4.0% in Hanover — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 378 days. Have you received any prior offers? Is the seller open to a 22% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.